November 17, 2019

Ag Economy (WASDE); Farm Bill Issues; and Trade

Agricultural Economy (WASDE Report)

Yesterday’s Crop Production report from the USDA’s National Agricultural Statistics Service (NASS) noted that, “Corn production is forecast at 12.3 billion bushels, down 1 percent from the October forecast and down 1 percent from 2010. If realized, this will be the fourth largest production total on record for the United States [related graph].”

The report added that, “Soybean production is forecast at 3.05 billion bushels, down slightly from the October forecast and down 9 percent from last year. Based on November 1 conditions, yields are expected to average 41.3 bushels per acre, down 0.2 bushel from last month and down 2.2 bushels from last year [related graph].”

Incorporating the NASS production estimates, the World Agricultural Outlook Board yesterday also released its monthly World Agricultural Supply and Demand Estimates (WASDE) report.

A summary of key variables for corn from yesterday’s WASDE report is available here, while a soybean summary can be found here.

A brief overview of yesterday’s reports was posted yesterday at the farmdocdaily blog (“Numerous Changes in Crop Production and Consumption Forecasts,”  by University of Illinois Agricultural Economist Darrel Good).

Gregory Meyer reported yesterday at The Financial Times Online that, “The US government said the nation’s corn fields yielded the least per acre in eight years, underscoring how tight supplies remain for the world’s primary feed grain.

“Farmers in the top agricultural exporter grew 146.7 bushels of corn per acre this year, the US Department of Agriculture said, 1.4 bushels less than its forecast a month ago. Because farmers planted vast areas with corn last spring, the US crop will still total 12.31bn bushels, the fourth-biggest in history but 123m bushels lower than previously estimated.

“Corn futures showed little response to the revised outlook as the market looked beyond the report to Europe’s spiralling debt crisis and a strong rise in the dollar, which makes US agricultural exports less appealing to foreign buyers.”

Yesterday’s article pointed out that, “Corn, mainly used for animal feed and to make the fuel ethanol, is scarce by historical standards. The USDA forecast US stocks would decline to 843m bushels by the start of next year’s harvest, the lowest level since 1996. Averaged across the season, grain prices are at records. Corn yields were hit after rains delayed planting and heat harmed stalks in the US.

“The disappointing US crop has been partly offset by strong corn and wheat harvests elsewhere, helping to avoid a food crisis on the scale of 2007-08. The USDA on Wednesday said the corn production outlook had brightened in China, Europe, Argentina and Russia, among other growers.”